Dr Vinay Kumar Jandial
Despite a mere 14.4 per cent contribution to the gross domestic product (GDP) in 2010-11, agriculture provides livelihood support to about two-third of India’s population and ensures employment to about 60 per cent of country’s work force. Indian agriculture, in spite of its declining share in the total GDP, has remained the backbone of the country’s economy. The contours of Indian agriculture started showing improvement gradually after the mid 1960s with the introduction of High Yielding Varieties, and the growing emphasis on the development of agro-infrastructure like irrigation, input supply, storage, marketing and distribution of food grains. The revolution, however, was biased towards irrigated regions and the benefits from this were not shared equally amongst all stakeholders across the country. Notwithstanding India’s journey of economic reforms since July 1991, lack of availability of quality inputs coupled with less vibrant and deficient institutional reforms have continued to plague the Indian Agriculture. The need of the hour is to map the existing agricultural infrastructure in the country and to find out the issues and challenges for their speedy resolution.
Problems of Agriculture Sector: FIFTEEN years of economic liberalisation have adversely affected Indian agriculture. The most prominent manifestation of this is in the drastic decline in the growth rate of food grains. The rate of growth of agricultural output was gradually increasing in 1950-1990, and it was more than the rate of growth of the population. In the 1980s the agricultural output grew at about four per cent per annum. Thus India became self-sufficient in food and started exporting wheat and rice. But during the 10-year period after the start of liberalisation, the rate of growth declined to two per cent. According to the Mid-term Appraisal of the Tenth Five Year Plan (2002-07), the rate of growth of the GDP in agriculture and allied sectors was just one per cent per annum during the year 2002-05. As a result, per capita availability of food grains decreased; the growth rate of population became higher than that of food grains, and India started to import food grains at a much higher price than that in the domestic market. Secondly, unemployment in the agricultural sector increased during the reform period as agriculture was not profitable due to the fall in the price of farm products. As a result, the number of people who are employed in the primary sector and the area under cultivation decreased, which in turn caused a decline in rural employment.
The suicide of farmers is the third fall-out of stagnation in agriculture. When agriculture was not yielding remunerative income, the life of the farmers became very desperate. Many of them committed suicide as a last resort. As revealed by Sharad Pawar, the Union Agricultural Minister, in the Lok Sabha in 2004, over one lakh farmers committed suicide in India after the economic reform started. According to the National Crime Records Bureau, 17,060 farmers committed suicide in the country in 2006 with Maharashtra having the highest number of (4453) suicide deaths. Punjab is the latest in the list of States having farmers’ suicide. This is a record in the agricultural history of India. It points to the acute nature of the problem which has affected the vast majority of the population, and which has created a real crisis.
* Cutback in Agricultural Subsidies: In the post-reform period the government reduced different types of subsidies to agriculture, and this has increased the production cost of cultivation. According to an economist, cutback in subsidy and control of fertilisers over the last few years has adversely affected the agricultural sector. It has increased the input cost and made agriculture less profitable. Since the decrease in subsidy to agriculture is part of the regulations of the WTO, it is related to the policy of globalisation.
* Lack of Easy and Low-cost Loan to Agriculture: After 1991 the lending pattern of commercial banks, including nationalised banks, to agriculture drastically changed with the result that loan was not easily available and the interest was not affordable. This has forced the farmers to rely on moneylenders and thus pushed up the expenditure on agriculture. The National Commission for Agriculture, headed by Dr M.S. Swaminathan, also pointed out that removal of the lending facilities and concessions of banks during the post-reform period have accelerated the crisis in agriculture. When the farmers were not able to pay back loan with high interest, they fell into the debt trap.
* Restructuring of the Public Distribution System (PDS): As part of the neo-liberal policy, the government restructured the PDS by creating two groups-Below Poverty Line (BPL) and Above Poverty Line (APL)-and continuously increased the prices of food grains distributed through ration shops. As a result, even the poor people did not buy the subsidised food grains and it got accumulated in godowns to be spoiled or sold in the open market. As the in-take from PDS was less it has affected the food security of the poor, especially in the rural areas, and this has indirectly affected the market and the farmers.
* Agriculture price policy: The prevailing policy of fixation of support prices of food-grains and their procurement and distribution mechanism have not been restructured satisfactory in the post reform era. The continuous enhancement of procurement price of various food-grains has impacted the food subsidy bill to rise to an unsustainable maximum. Lack of domestic marketing reforms limited the free movement of agro-produce across the States. In the post-reform era Government has failed to take adequate and appropriate action towards policy relating to introduction of future markets, amendments/ abolition of Essential Commodities Act, stocking and pricing of goods.
Agriculture, even today, is considered to be a viable source of livelihood and effective rural job creator. Food and livelihood security is not only of greater economic significance, but also a very important socio-political concern in large agrarian economics like India. Thus, it is required to assess the likely impact of globilisation and accordingly modify and rewrite the agricultural strategy for maximizing benefits from the new opportunities opened up by trade under WTO.
(The author is Agriculture Extension Officer, Department of Agriculture, Jammu)
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